The Glossary describes the following keywords:
Social requirements are part of most Standards and Codes of Conduct. In general, they are focused on health and working safety, and international labour core requirements (ILO) like compensation, working hours, prohibition of child labour and other related aspects which indicate working rights and conditions. The defined requirements need to be met in order to achieve → compliance, and to be socially responsible.
The ILO (International Labour Organsiation) defined eight conventions to be fundamental to the rights of human beings at work, independent of a countries development level. Aiming at the establishment of globally recognised social standards, these eight conventions are:
- Convention 29: Forced Labour Convention (1930)
- Convention 87: Freedom of Association and Protection of the Right to Organise Convention (1948)
- Convention 98: Right to Organise and Collective Bargaining Convention (1949)
- Convention 100: Equal Remuneration Convention (1951)
- Convention 105: Abolition of Forced Labour Convention (1957)
- Convention 111: Discrimination (Employment and Occupation) Convention (1958)
- Convention 138: Minimum Age Convention (1973)
- Convention 182: Worst Forms of Child Labour Convention (1999)
The core conventions mirror the four core labour standards that constitute minimum social standards:
- Freedom of Association and the effective Recognition of the Right to Collective Bargaining;
- the Elimination of all Forms of Forced or Compulsory Labour;
- the effective Abolition of Child Labour; and
- the Elimination of Discrimination in respect of Employment and Occupation.
Standards in the context of social responsibility are catalogues of requirements (social, environmental, but in some cases also regarding quality). The comparison of an organisation’s policies and behaviour with such a catalogue allows for the assessment of that company’s social responsibility.
In many cases standards are developed by international organisations and therefore more comprehensive than e.g. Codes of Conduct which are often drafted by companies.
A Code of Conduct is a formal statement of the values and business practices of a trade retailer and its suppliers. It is a statement of minimum standards together with a pledge by the trade retailer to observe them and to require its contractors, subcontractors, suppliers and licensees to observe them as well.
Compliance refers to the acceptance and implementation of, as well as the adherence to relevant standards or requirements.
A management system focuses on all personnel and organisational activities of a company. All activities shall lead to the achievement of best practice regarding the company’s aims such as quality requirements, complying with regulations, or meeting environmental objectives. It is called a “system” because it has a continuous structure which defines procedure with detailed functions. Depending on different areas of responsibilities the management system includes different methods which describe the appropriate procedures and connections.
Regarding the party that is implementing an audit, three types of audits can be distinguished:
- A First Party Audit is an internally conducted audit, i.e. an audit carried out by the company/producer himself. The aim of First Party Audits is in most cases the disclosure of deficits in the organisation and the improvement of such lacks.
- Second Party Audits are realised not by the audited company itself but by an external company that has direct business relations with it. In many cases the audited company is the supplier of the auditing company. Therefore, this kind of audit is often called “supplier audit”.
- Third Party Audit refers to an audit that is – similar to the Second Party Audit – not conducted directly by the company concerned. But other like in the case of the Second Party Audit, the audit is not done by the company’s customer or business partner himself but the audit is done by an independent, a third party that acts on behalf of the customer. Certification audits are most frequently realised in this constellation.
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Phases of Implementation
- Pre-Assessment: The Pre-Assessment collect basic data on the company to be audited, such as address, business sector, company size etc. It also raises the awareness in the company concerned for the → audit, the issues that are subject to it and its implications. Furthermore it gives the auditing party a first impression of the status-quo of the company.
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Audit: An audit is an evaluation of a system, process, person, or company. It is an instrument to assess whether the audited company, process, system or person does meet certain criteria and requirements. The characteristics of and situation at the audited entity (the Auditee) is rated along a pre-defined list of criteria.
In the course of the audit certain week-points may be discovered in the audited system. These weak points are issues where the system does not meet the requirements. The correction of these weak points can be subject to a subsequent correction process.
Other than the monitoring, the Audit is limited to a short time, e.g. a one-day-visit of the auditor to the audited factory. In many cases, audits are conceptualised as Pass- or-Fail-Situations.
- Monitoring: Monitoring in the optimal case is a continuous process of recognition, evaluation and optimization of identified weak points within a company. The situation on site is analysed, the results are evaluated and corrective action is executed to optimize the performance defined. The process should be designed and implemented in a continuous circle.
- Corrective Action Plan: In order to correct the weak points observed a Corrective Action Plan (CAP) is worked out that shall by its stepwise implementation lead to the improvement of the auditee’s performance.
- Follow-Up: The follow-up includes activities of different kind. Follow-Ups are of importance especially in cases where non-compliances with the requirements are detected.
- Remediation Programme: A remediation programme is a systematic concept for the improvement of deficits regarding certain criteria of e.g. social compliance. The programme seeks to tackle the problem from different sides, therefore creating a holistic approach.
- Certification: After the successful passing or completion of the audit and/or monitoring process the auditee is in some systems (certification audits) be given a certificate to document his → compliance with the requirements.